yearn.finance
Crypto Overview
Overview and Intended Utility
Yearn.finance is a decentralized finance (DeFi) protocol that aims to optimize yield farming across various DeFi platforms. The YFI token serves as a governance token, allowing holders to vote on protocol changes and participate in decision-making.
Core Functions and Business Model
The protocol automatically moves users' deposits between different DeFi lending protocols to maximize returns. Yearn's vaults (yVaults) are smart contracts that implement various yield farming strategies. The business model is based on performance fees (20%) and management fees (2%) from the yields generated.
Actual Utility Assessment
On-chain data shows active usage of Yearn's vaults with approximately $400 million in Total Value Locked (TVL) as of 2024. The protocol maintains robust development activity with regular updates and strategy implementations. The governance token is actively used for its intended purpose, with regular community proposals and voting.
Token Distribution and Founder Analysis
YFI had a fair launch with no pre-mine, with all tokens distributed to users who provided liquidity in the early days. The founder, Andre Cronje, and the team did not receive any initial allocation. The protocol is now fully community-governed through a DAO structure.
Revenue Model Analysis
The primary revenue streams come from performance and management fees from yield strategies. These strategies involve complex interactions with other DeFi protocols, including lending and liquidity provision. Some strategies may involve interest-bearing components which require careful consideration from an Islamic finance perspective.
Crypto Impact
To assign a comfort level investing in yearn.finance from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to yearn.finance.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.